Bruce GuthrieGlenna AuerbackAndrew Bindman

What changed when incentiveschanged in California Medicaid?

Pay-for-performance as panacea?

“Pay for performance’s goal is not simply to reward those who perform well or to reduce costs. Rather, it is a mechanism to align incentives to encourage ongoing improvement in a way that will ensure high-quality care for all.”

Institute of Medicine 2006

Pay-for-performance in Medicaid

• Public insurance for the poor & disabled

• Federally defined minimal provision, but considerable State autonomy

• Mixed public-private provision

• Cash-strapped

California Medicaid

Medi-Cal Managed Care• 8 counties with a single

health plan• 14 counties with a

choice of health plan

The ‘pay’ in Medi-Cal pay-for-performance

• Auto-assignment of new enrollees who don’t choose a plan– ~25% enrollee turnover annually– ~25% of new enrollees don’t choose a plan– ~5% of plan membership at risk each year

• Attractions– Cost neutral and simple to implement

• Disadvantages– Variable and opaque incentive

The ‘performance’ in Medi-Cal pay-for-performance

• Composite quality score determines auto-assignment share

• Five HEDIS measures– Childhood immunisations– Well child checks– Adolescent well care– Timeliness of pre-natal care– Appropriate medications for people with asthma

Research questions

Qualitative1. Were plans incentvized?2. What did plans do in response?3. What are the perceived consequences

Quantitative4. Did incentivized quality change?5. Did non-incentivized quality change?

Methods - qualitative

• Documentary analysis– Public reports– Advisory Group minutes and briefing notes

• Semi-structured interviews with:– Plan CEOs, Medical Directors, QI Directors– Other members of Stakeholder Advisory

Group– 20 interviews with 29 participants– 12 out of 15 plans in affected counties

Methods - quantitative

• Comparison of changes in quality in:– Managed care counties with choice of plan (intervention)– Managed care counties with a single plan (control)

• Difference-in-differences analysis of changes in quality from ‘before’ to ‘after’ implementation

• HEDIS data for 4 incentivized and 4 non-incentivized measures 2004-2007

• Preliminary/premature results for discussion and to demonstrate methods

Q1. Were plans incentivized?

• Performance based auto-assignment is an incentive– Members as money– Members as mission

• But it’s one incentive among many– State regulation– Internal motivation to deliver high quality– Business case

“We’re doing the Lord’s work, we’re protecting the safety net.”

Chief Executive Officer

“I think of it as membership, but of course, marketing and finance think of it as dollars.”

Medical Director

“Well [auto-assignment] is definitely one of the drivers, you know, of what are we going to work on this year. … The other drivers, you know, you’ve got the HEDIS, the Minimum Performance Level drivers. You’ve got your collaboratives.”

Medical Director

Q2. What did plans actually do?

• Member focused QI– Information, reminders, incentives

• Provider focused QI– Information, technical support, incentives

• Improve data collection– Reliable data collection, data warehouses

• Change in focus more than de novo QI

“When they chose those five HEDIS rates, those became the sacred five. … We have a small provider incentive that is limited to a certain number of providers … All the time, people are asking me “Can we add another one [provider]?” and Well Baby is not one of the five… Would I rather spend that money on one of the five, well yeah. Those are the five.”

Quality Improvement Director

Q3. Perceived consequences

• Better HEDIS scores– Better quality of care?– Better quality of data?

• Risk of crowding out other QI activity

• Risk of decreased collaboration with competitor plans in QI work with providers

“I think there is early evidence in increases in our HEDIS scores that are having an impact on patient care, but … there is a reporting aspect to this as well. That you could have an improvement in how you collect data, that will also improve your HEDIS scores.”

Medical Director

“I think what it’s done is made you have to go out and spend a lot of money to try to collect the data … So you’re actually kind of diverting probably, dollars from providing actual quality into documenting quality.”

Vice President

“I would prefer it not to be competitive. … I think what’s most effective is change at the provider level. And change at the provider level requires co-operation among payers.”

Chief Executive Officer

Summary of qualitative findings

• Incremental not transformational

• Expect to improve incentivized measures

• Concern that non-incentivized care could be made worse

• Concern about competition reducing collaborative work with providers

Q4. Did incentivized quality change?

Same for:Timeliness of prenatal careAppropriate asthma medications

No difference (3 measures) Significant difference (1 measure)

Childhood immunizations combo 2

0%

20%

40%

60%

80%

100%

Imms2004 Imms2005 Imms2006

Year

Per

cen

tag

e r

ec

eiv

ing

ap

pro

pri

ate

car

e

Pay-for-performance plans

Comparison plansAdolescent well care

20%

40%

60%

80%

100%

AWC2004 AWC2005 AWC2006

Year

Pe

rce

nta

ge

re

ce

ivin

g a

pp

rop

ria

te c

are

Pay-for-performance plans

Comparison plans

Q5. Did non-incentivized quality change?

No difference (3 measures) Significant difference (1 measure)

Same for:Post-natal careChlamydia screening

Well Child checks 1st 15 months

0%

20%

40%

60%

80%

100%

WC152004 WC152005 WC152006

Year

Per

cen

tag

e re

ceiv

ing

ap

pro

pri

ate

car

e

Pay-for-performance plans

Comparison plansCervical cancer screening

0%

20%

40%

60%

80%

100%

CS2004 CS2005 CS2006

Year

Per

cen

tag

e s

cre

en

ed

Pay-for-performance plans

Comparison plans

Implications for US policy

• More evidence that pay-for-performance isn’t rapidly transformational

• Transparency of incentives

• Who should be incentivized

• Scope of pay-for-performance

• Competition with incentives vs a coherent single system

Implications for the UK

• Pay for performance as a useful, but uncertain tool

• Incentives for quality when cash is tight

• Pay for performance for UK hospitals?

• Policy debate about relative effectiveness of competition vs collaboration vs command– Competition between providers vs competition

between purchasers

Thank you!